Aug 23, 2016

    Mixed bag for Asian traders over US Fed rate concerns

    ASIAN markets had a mixed day with investors again on edge over expectations that United States interest rates are about to go up again.

    Federal Reserve officials have been hinting over the past week about a possible September hike as the country's growth outlook firms up.

    Fed chairman Janet Yellen is expected to speak later this week, prompting investors to batten down the hatches.

    Singapore's benchmark Straits Times Index (STI) took the cue from Wall Street's decline on Friday and closed down 2.83 points or 0.10 per cent at 2,841.19, on only $586.3 million worth of shares traded across the entire market.

    Shanghai was off 0.75 per cent, due also to profit-taking, while Hong Kong added 0.27 per cent on a slow day.

    Japan's Nikkei rose 0.32 per cent after the yen weakened against the greenback.

    Of the 30 STI component stocks, 13 ended in the red yesterday, with StarHub leading the losers, down 10 cents or 2.60 per cent at $3.75.

    SingTel ended flat at $4.19 while M1, which is outside the STI, dropped one cent or 0.37 per cent to $2.71.

    DBS analyst Sachin Mittal downgraded his call on both StarHub and M1 to hold yesterday. This followed StarHub's move last week to launch aggressive new broadband plans that come with an estimated 10 per cent drop in average revenue per user compared with the telco's overall average.

    Mr Mittal read the move as a response to the likely emergence of a fourth telco operator in the spectrum auction to be held around October.

    Developer City Developments pared 15 cents or 1.72 per cent to $8.58 while CapitaLand was off one cent or 0.32 per cent to $3.08. CapitaLand Commercial Trust also ended lower, dropping one cent or 0.64 per cent to $1.56.

    CapitaLand Retail China Trust added one cent or 0.63 per cent to $1.61, following news that it has entered into an agreement to acquire a Chengdu mall.

    It will be the trust's 11th mall in China.

    Meanwhile, Keppel Corp added seven cents or 1.32 per cent to $5.37, leading the nine STI gainers yesterday.